Emmy Would Like to Organize PRK as Either an LLC

question 31

Essay

Emmy would like to organize PRK as either an LLC or as a corporation (taxed as a C corporation)generating a 15 percent annual before-tax rate of return on a $100,000 investment.Individual ordinary rates are 25 percent,corporate rates are 15 percent,and individual capital gains and dividends tax rates are 5 percent.PRK will distribute its earnings annually to either its members or shareholders.
a.Ignoring self-employment taxes,how much would Emmy keep after taxes if PRK is organized as either an LLC or as a corporation (taxed as a C corporation)?
b.Ignoring self-employment taxes,what are the overall tax rates (combined entity and owner level)if PRK is organized as either an LLC or a corporation (taxed as a C corporation)?

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Definitions:

Per Capita Income

The average income earned per person in a specific area or country.

World's Income

The total amount of economic output or earnings generated globally within a specific time period.

Productive Resources

The inputs used in the production of goods and services, typically categorized into land, labor, and capital.

Population Growth Rate

The population growth rate is a measure of how the number of individuals in a population increases or decreases over time, usually expressed as a percentage.